user
Explain the concept of tax incentives.

assistant
Tax incentives are economic benefits offered by federal or state governments to encourage businesses and individuals to take specific economic or financial actions, such as investing in research and development, hiring employees, providing employee benefits, or investing in technological growth. They are typically offered in the form of tax credits, deductions, or deferrals that reduce individuals' or businesses' tax liability. By providing financial incentives, governments hope to stimulate economic growth and encourage investment in specific areas.